Tishman International Companies' Sofia Airport Center (SAC) has captured two awards in the 11th national "Building of the Year" contest, sponsored by the Bulgarian Ministry of Regional Development.

SAC, which is Bulgaria's first commercial Leadership in Energy and Environmental Design (LEED) certified development, garnered awards in two categories: "Public Buildings with Business Functions" and "Green Buildings."

"We are pleased that Sofia Airport Center has been recognized with these prestigious awards," said Alan D. Levy, Chairman of Los Angeles-based Tishman International Companies, SAC's developer and owner/operator. "We believe this development will serve as an example for future commercial projects in Bulgaria."

"We saw the potential in the Bulgarian market many years ago. I am proud we managed to be successful not only in the means of our own development, but by attracting international companies to be our tenants and expand their business in the country," said Julian Edwards, Tishman's European Managing Director.

Awards were presented at a ceremony attended by representatives of leading companies and institutions associated with construction of the most cutting-edge buildings and urban developments throughout Bulgaria.

One of the key points towards achieving this success was the choice of our subcontractors and partners involved in the construction of the Office Building A2. Siemens provided a modern, automated building management system (BMS). The unique Variable Air Volume (VAV) HVAC system is managed by the BMS, which allows a complete control of the environmental conditions and the energy consumption. The intelligent building management system by Siemens, which meets the international standards of LEED and BREAM, makes Sofia Airport Center one of the most energy-efficient business complexes in our nation and Eastern Europe.

"For every building, it is critical to achieve optimal comfort with minimum energy costs, which is a key indicator for the energy efficiency of the building", said Plamen Pavlov, Project Manager Building Technologies at Siemens Bulgaria.

"The precise and economical use of energy is the main advantage in adopting such a system. The functions of the BMS system used in Sofia Airport Center, offer class A+ energy efficiency and ROI in short term period," he added.

Tishman International Companies is currently active in the United States, United Kingdom and Central & Eastern Europe including Bulgaria, Hungary, Czech Republic, Slovakia and Romania. The firm specializes, in the acquisition, development, management and financing of commercial real estate. Tishman has been a consultant and joint venture partner to some of the world's leading institutions and private investors and has recently been appointed by a UK Fund to provide asset and development management services for a portfolio of 12 properties located in Romania, Hungary, and Slovakia.

In 1986, Tishman International established its European headquarters in London, England. Since then, the company has developed and managed in excess of six million square feet of premier office and commercial space in the United Kingdom. Additionally, Tishman has provided acquisition and management expertise for millions of square feet of prime real estate assets in Europe, including several Supermarket Centres in the Czech Republic for an International Supermarket Company.

Its roster of clients and partners has included Metropolitan Life, New York Life, Teachers Insurance, Bank of America, Grosvenor International, Citibank, American Express, Fidelity Investments, Lend Lease, HVB Real Estate, and many others.

The Siemens Building Technologies Division (Zug, Switzerland) is the world leader in the market for safe and secure, energy-efficient and environment-friendly buildings and infrastructures. As technology partner, service provider, system integrator and product vendor, Building Technologies has offerings for safety and security as well as building automation, heating, ventilation and air conditioning (HVAC) and energy management. With around 29,000 employees worldwide, Building Technologies generated revenue of 5.8 billion Euro.

The first Novotel Sofia, a high-class accommodation and office venue, has been opened in the Bulgarian capital.

Novotel Sofia is part of the world's leading hotel operator Accor, and is said to be providing its customers with the same high level of comfort as everywhere in the world.

The Bulgarian investment company MHQ Ltd. is Accor's partner for the project, the organizers said. The building combines two uses – hotel accommodation and office.

The hotel's major facilities are situated on the first two levels of the building, the Class A office space of 7500 sq.m. on the next six levels, and the hotel guest rooms on the top seven levels up to the 15th floor.

„Novotel Sofia is the first hotel of the Accor family in Sofia and the only international 4* hotel built fully in line with the latest brand's standards. We trust that its excellent location will be a valuable asset for the business society in Bulgaria and that the hotel will become the preferred choice for foreigners to stay, dine and work while visiting the country", said Vincent Dujardin, General Manager of Novotel Sofia.

Based on the global experience, Novotel Sofia provides expertise in planning business events with structured, state-of-the-art equipment, conference guidance, etc.

With its 6 meeting halls, the hotel can accommodate up to 280 participants and the biggest wedding capacity is 160 seats. Novotel Sofia also features the innovative Eureka concept meeting room designed for today's idea driven and creative meetings.

A large selection of international wines and a healthy balanced cuisine find their place at the Nouveau Sens restaurant, the management said.

Novotel is mid-scale hotel of Accor group, the first hotel operator worldwide, with nearly 3,500 hotels and 160,000 employees in 92 countries.

The Novotel group is a pioneer in the area of sustainable development, and all Novotel hotels participate in the EarthCheck worldwide environmental certification program.

Novotel offers close to 400 hotels and resorts in 60 countries, situated in the center of major international cities from business districts to tourist destinations.

MHQ Ltd. is a Special Purpose Vehicle (SPV) for the realization and operation of the mixed-use building. It is a daughter company of Markan Ltd. established in 1993. Markan is one of the top rated construction companies in Bulgaria, providing high quality of work performedby delivering modern design, precise, safe and environmentally friendly execution on schedule.

December 5, 2012FT: Bulgaria On the Winding Road to Stability

Financial Times

By Neil Buckley

Compare what is happening in Bulgaria with the state of affairs in countries around it – economic crisis in Greece, surging unemployment in parts of former Yugoslavia, political troubles in Romania – and one phrase recurs: "We are", says the country's president, Rosen Plevneliev, "an absolute island of stability".

The claim, repeated by many senior Bulgarians, has substance. Though the economy shrank by 5.5 per cent in the 2009 global recession, unlike neighbouring Serbia, Romania and Greece, Bulgaria required no international bailout. It has since had 13 consecutive quarters of growth, even if this has been anaemic. With among the lowest budget deficit and government debt figures in the European Union, it is one of only three countries, alongside Finland and Denmark, that fully meet the Maastricht criteria for euro membership.

There have been no mass street demonstrations against austerity, though occasional protests on specific issues have flared. Support for premier Boyko Borisov’s government has waned since it came to power on an anti-corruption platform in 2009. But polls suggest in parliamentary elections due next June or July it may be the first in Bulgaria’s post-communist history to win re-election.“You can’t underestimate his charisma,” says Ognian Shentov, director of the Centre for the Study of Democracy, a think-tank, of Mr Borisov, a square-jawed former police chief and karate black belt. “His approval rating is high. People trust him.”

Beneath the surface of stability, however, lurks disquiet: about the state of democracy, about how much is still to be done in the battle with graft and organised crime and the need for deep reforms to enhance growth prospects. Such complexities of today’s Bulgaria reflect an often rocky post-communist transition. After faltering early reforms, it slid into an economic and banking crisis and hyperinflation in 1996-97. The currency, the lev, lost 90 per cent of its value in the year before it was pegged in 1997 to the German mark, and later the euro, in a currency board arrangement that remains an economic anchor.

After a period of more effective reforms and privatisations, Bulgaria joined Nato in 2004 and the EU in 2007 and began to transform its business environment. Like other new EU members, it had seen in the years before the 2008 financial crisis a flood of foreign investment, which had fuelled rapid growth. But not enough went into factories and too much into non-tradable sectors such as real estate. This inflated a bubble which – as in Ireland and Spain, if with slightly less force – burst after Lehman Brothers went bankrupt.

Bulgaria remains the EU’s poorest country, with the lowest average wage. Helped by EU funding, which the country has become more adept at managing, the government has preserved some sense of progress despite slow post-crisis growth and the need to rein in public finances. It has built a metro in Sofia and started to construct motorways and upgrade railways. Under Vejdi Rashidov, a renowned sculptor brought in by Mr Borisov to be culture minister, the country, for the first time since the 1980s, has even modernised theatres and opened new museums.

“We have started delivering on Bulgarians’ dreams” for better roads and infrastructure, says Mr Borisov. “We did it in Sofia,” where he was mayor from 2005 to 2009, he adds, “and now we have done it for the rest of Bulgaria.” Yet the country has long battled perceptions in western Europe that it, like neighbouring Romania, was admitted to the EU before it had done enough to tackle corruption and organised crime. It has had to live with continued EU monitoring of progress in those areas, which Brussels says remains inadequate.

Perhaps more unsettling are accusations that the country has slipped back in some other key areas. The fact that the popularity of Mr Borisov and his Citizens for the European Development of Bulgaria party (known by its acronym, Gerb) has held up reasonably well, say opponents, can be explained not just by charisma and new roads. It owes much to a largely pliant print media, much of it in the hands of owners loyal to the government. Neelie Kroes, European Commission vice-president, wrote to Mr Borisov in October expressing concerns about media freedom.

Meglena Kuneva, formerly Bulgaria’s first EU commissioner and who has set up a political party, says the country has retreated, politically, since its EU admission. “I swear – and I was the chief negotiator for my country, so believe me – that if Bulgaria was to negotiate [EU] accession now, it would fail.”

Georgi Kadiev, who last year was Sofia mayoral candidate for the main opposition Socialist party, agrees. Bulgaria’s biggest problems during its membership negotiations, he notes, were in concluding talks on “Chapter 24” – relating to justice, freedom and security. “I don’t think Bulgaria would be able to close this chapter today,” he says.

Mr Borisov rebuffs such criticisms. “Bulgaria is number one in terms of freedom of speech,” he says. “We have 240 media outlets, if not more. Everyone is free to say and write whatever he or she wants.”

Some critics suggest Mr Borisov, by appointing loyalists and using the authority stemming from his own law enforcement background, has established a firm grip on power based on control of the police and security services.

Evgenii Dainov, an academic, writer, and civil society activist, says Bulgarian democracy had long been something of a “facade”. “The facade still reflected some reality,” he adds. “But today, on top of this, we have the first concerted attempt at establishing personal rule.”

Symbolic of how things have developed, say critics, was last month’s scandal over the nomination to Bulgaria’s constitutional court of Veneta Markovska, a magistrate who then faced accusations of links to corruption, which she denied. Though nominated by parliament, she was widely seen as backed by Gerb.

The European Commission, without naming her, made its concerns apparent by threatening to publish an emergency report under the “co-operation and verification mechanism” that monitors Bulgaria’s reforms. President Plevneliev, a Gerb member, ultimately blocked Ms Markovska’s swearing-in.

Opposition parties warn of potential attempts to manipulate next year’s parliamentary elections. They claim that regional elections last year were the dirtiest for some years. Many observers, including Mr Dainov, suggest Bulgaria’s relatively well-developed civil society will ensure the poll is fair.

Whoever wins next year’s elections faces big challenges in ensuring Bulgaria can benefit fully from any broader European upswing, and deliver the growth still needed to narrow the gap with wealthier EU members. As even Mr Plevneliev acknowledges, Bulgaria needs deep reforms of its creaking healthcare and education systems.

Real progress on the rule of law will be necessary, too, not just to satisfy the EU and ordinary Bulgarians, but to help foreign investment rebound to healthier levels. Many say the government deserves credit for avoiding a damaging economic or fiscal “bust”, keeping the deficit under control and making progress on infrastructure.

The government’s problem, says Parvan Simeonov, analyst at pollster Gallup, was not too much power but “not using this power for major reforms”. There had been too much governing “day by day, sometimes even hour by hour”.

November 14, 2012France, Spain Again Top Destinations for UK House Hunters

British investors seem to be back to their old habits, looking little further than a farmhouse in France or an apartment on the Costa de Sol and are no longer tempted by countries such as Bulgaria and Turkey.

France tops the list of the top destinations for British home buyers, with 23% of potential buyers looking to own a property across the Channel, according to the HiFX Property Hotspots report.

"France remains a safe bet for Brits. It goes without saying that the sun and lifestyle are a big pull but buyers can now get better value for their money and take advantage of the weakening euro," Mark Bodega, director at HiFX, commented.

Just behind France in the popularity stakes is Spain. According to the survey, 19% of potential overseas property buyers want to buy in the sun.

"Spain is still popular with Brits who are hoping to take advantage of lower property prices. In years gone by bargain-hunters would focus inland, particularly looking for rundown properties that needed some work," Mark Bodega added.

"As inland prices have fallen the most since the property crash this is still true, however, prices have fallen on the coast dramatically as well giving bargain hunters plenty of choice."

The third most popular destination for people looking to buy abroad is across the Atlantic, with seven per cent saying they are turning their attentions to the US - another property slump hit location.

Italy, Cyprus, Portugal and Switzerland make the rest of the top seven list for destinations to buy overseas.

Bulgaria, which used to be a top destination for a second place in the sun for Brits, has been seeing lately the Russians steadily replacing the Brits and Irish as the buyers on the market.

While the trend is not new, and started after the global economic crisis, the Brits are now again increasingly active on the Bulgarian market of vacation properties but this time by selling.

Regardless of the ongoing economic hardship in Bulgaria, its capital appears set to feature soon its first skyscrapers, considering the local scale.

The Capital Fort project on the Tsarigradsko Shose Blvd, and Millenium Center in downtown Sofia, which are still under construction, are scheduled for completion in 2013-2014, reaching 126 meters and 112 meters respective, the Sega daily writes in a report.

The daily emphasizes that these two projects will demonstrate whether tall buildings have a future in the Bulgarian capital Sofia as a business model, adding that given the large amount of unoccupied office space already in existence in the city, the skyscraper candidates may also end up with empty offices.

The report notes, however, that the investors in Sofia's future skyscrapers are optimistic about the development of business and the economy in Bulgaria, regardless of admitting that the management of these new projects will be a challenge.

They are said to believe that the construction of tall buildings in Sofia will make the city more like the global metropolises, and will be a sign of prestige.

The Sega daily cites data of real estate agencies stating that about 30% of the office space in Sofia remains unoccupied at present, and mentions that against this backdrop Capital Fort and Millenium Center are ambitious projects.

Capital Fort is a project of UK firm Atkins, the investor is Fort Knox. The 126-meter building will be completed in mid-2014, and will be tallest than Sofia's tallest building at present – the Rodina Hotel, which stands at 104 meters. Its office space will total 80 000 square meters.

Millenium Center's first building will be 112 meters tall; its total area will be 136 300 square meters, including both office and residential space. Its investor and builder is NIKMI AD.

October 23, 2012Bulgarian Residential Property Prices Slump Further

The index of residential property prices calculated each quarter by Bulgaria's National Statistical Institute has gone by 0.5% in the third quarter on a quarterly basis.

The decline in Bulgaria's residential property prices is greater when estimated year-on-year – the index is down by 2.2% compared with the third quarter of 2011.

All of Bulgaria's 27 district capital cities saw their residential property prices go down in the third quarter of 2012.

The largest decreases in the price of residential real estate on quarterly basis was registered in the southwestern city of Kyustendil – 3.5%, in the northwestern city of Montana – 3.4%, and in the southern city of Pazardzhik – 2.7%.

The average price per square meter of residential property in Bulgaria in July-Septemer 2012 was BGN 881.21, as estimated by the NSI.

The highest average prices per square meter of residential property in Bulgaria were found in the capital Sofia – BGN 1 447.33 per square meter, in Varna – BGN 1 425.83, and in Burgas – BGN 1 135.83.

Sofia Airport Center which was officially opened on Thursday is Bulgaria's first Leadership in Energy and Environmental Design (LEED) commercial development.

The project, when built out, will consists of 180,000 square meters of Class A office space and 28,000 square meters of logistics and warehouse space, which is already operational and 100 percent occupied. The construction of a hotel with 175 rooms and new office and logistics buildings are planned for the future.

"Tishman International is a leader in innovative technologies and sustainable development and has always taken care of its tenants in the best possible way", said Alan D. Levy, Chairman of Tishman International. Our Bulgarian project is a model for high-quality construction not only in the Eastern-European region, but in Europe as a whole. In Bulgaria we have a well-trained team, under the directory of Julian Edwards, Managing Director - Europe for Tishman International, which worked very hard, so that now we can all be proud with Sofia Airport Center", he added.

All tenants who sign Letter-of-intent by the end of the year in the new business center will be able to use the complimentary services of professional architects and will be provided with furnishings for their multipurpose space at no additional charge. "This is an integral part of our program to stimulate companies to offer zones for relaxation, as we believe this will increase the level of motivation and creativity of the employees", said Mrs. Olga Stoichkova, SAC's Leasing Manager.

"Reducing energy consumption is of extreme importance to commercial buildings in the capital, not to mention the fact that it preserves the environment. I am conviced that business parks such as Sofia Airport Center are only the beginning of a new construction era in the capital, one that will contribute to a cleaner and nicer city. "Tishman is giving us a good lesson, one that we should learn", said the Mayor of Sofia, Jordanka Fandakova.

SAC incorporates environmentally friendly materials with state-of-the-art technologies to reduce operating costs as much as 30% and provide a comfortable, healthy environment for employees. Sustainable features include an energy-efficient Variable Air Volume (VAV) HVAC system, controlled by an automated building management system (BMS); advanced fiber optics; abundant natural light through open atriums and double-gazed windows; height, 2.85-meter ceilings; and solar shading on building exteriors to reduce heat and solar gain.

Tishman has also established an onsite sports facility within the Logistics Center of SAC. The fully equipped Dance and Aerobics Studio, which is open to all SAC employees and community residents, offers a variety of after-work training classes, including zumba, tae-bo, yoga and Bulgarian national dances.

"This technologically advanced commercial development features Western European/U.S-style onsite management services, which has attracted a roster of prestigious international companies that have chosen SAC for their regional or national headquarters", noted Julian Edwards.

Tishman International Companies is currently active in the United States, United Kingdom and Central & Eastern Europe including Bulgaria, Hungary, Czech Republic, Slovakia and Romania. The firm specializes, in the acquisition, development, management and financing of commercial real estate. Tishman has been a consultant and joint venture partner to some of the world's leading institutions and private investors and has recently been appointed by a UK Fund to provide asset and development management services for a portfolio of 12 properties located in Romania, Hungary, and Slovakia.

In 1986, Tishman International established its European headquarters in London, England. Since then, the company has developed and managed in excess of six million square feet of premier office and commercial space in the United Kingdom. Additionally, Tishman has provided acquisition and management expertise for millions of square feet of prime real estate assets in Europe, including several Supermarket Centres in the Czech Republic for an International Supermarket Company. Its prestigious roster of clients and partners has included Metropolitan Life, New York Life, Teachers Insurance, Bank of America, Grosvenor International, Citibank, American Express, Fidelity Investments, Lend Lease, HVB Real Estate, and many others.

House prices in Bulgaria fell by 2.6% on an annual basis in the second quarter of 2012, according to a report of the Knight Frank consultancy.

The latest edition of the Knight Frank Global House Price Index, which compares the performance of mainstream residential markets across the world on a quarterly basis, includes 54 countries, with Bulgaria ranking 39th.

Bulgaria is one of the 23 countries to register decreases in house prices in the period Q2, 2011 - Q2, 2012.

The decrease in house prices in Bulgaria decelerates in 2012.

The first six months of 2012 bring a decrease of only 0.3%, while house prices increase by 0.2% on quarterly basis in Q2, 2012.

According to data of the National Statistical Institute (NSI), the increase registered in Q2, 2012 is the first quarterly growth since end 2008, when Q4, 2008 started a spate of 14 successive drops in house prices.

The latest edition of the Knight Frank Global House Price Index shows that Ireland registered the largest decrease, with house prices falling by 14.4% on an annual basis in the period April-June 2012.

The apartment prices in the Bulgarian capital Sofia have declined below EUR 1 000 per square meter for the first time in five years, according to a report by Arco Real Estate, a consultancy.

Housing prices in Sofia have declined by a total of 6% over the past year, with prices in the western parts of the city dropping by 9%, and prices in the northern-northeastern outskirts collapsing by 19%, down to as little as EUR 433 per square meter, the firm said in a report Tuesday.

At the same time, the prices of real estate properties situated along the soon-to-be opened second line of the Sofia Metro have seen a slight increase, the report concludes based on a research of the Sofia real estate market since the start of 2012.

The permits issued for the construction of new apartment buildings in Sofia declined by 23% in H1 of 2012 year-on-year; some 56 000 square meters of residential space is under construction in the Bulgarian capital as of mid 2012, a slight increase.

However, the construction of office buildings in Sofia has almost stalled, with permits issued for less that 5 000 square meters of office space since the start of 2012, the report says.

It concludes that the oversupply of office space coupled with the lack of a substantial demand by tenants in Sofia keeps rental rates low, while leaving substantial amounts of office space free.

Class A office space deals are said to be made for EUR 10-12 per square meter per month, while less high-profile locations see rates of EUR 3-5 per square meter per month.

The report also notes that the upcoming opening of two large shopping malls with office centers - Paradise Center and Bulgaria Mall - scheduled to be launched in Sofia by the end of 2012 - will boost the total office space for rent in Sofia's mall complexes by 50% to 320 000 square meters.

While the average rent for office space in the shopping mall complexes in Sofia is estimated at EUR 24 per square meter per month, some of the most high-profile locations can see rates of up to EUR 45 per square meter per month, the Arco report says.

It also forecasts an improved dynamic of the real estate market in the Sofia downtown after the completion of the ongoing construction and rehabilitation works there.

August 20, 2012Bulgaria Top Property Destination for Russian Govt Officials

Bulgaria is tops the list of international property destinations for Russian state officials, according to a survey of the Russian newspaper Vedomosti.

The survey was carried out in connection with a bill that is to ban all Russian MPs, military officers, and administrators - and members of their families - from owning properties abroad.

Vedomosti surveyed 1000 property declarations of Russian officials, and found that over 100 declared they own property abroad.

About one-third of all real estate properties abroad owned by Russian government officials are in Bulgaria; those are most cheap and small apartments.

Bulgaria is followed by Italy where the Russian MPs purchase primarily provincial villas. Beachfront properties in Spain come in third, while, according to the declarations, Finland is a more popular property destination for Russian officials than Greece.

"We wanted a place where we could go to with our young son, and this was the best at the moment: good location, good infrastructure, warm sea, fresh fruit, everything that kids need," Andrey Melnikov, Deputy Director of the Russian Agency for Insurance and Deposits, is quoted as saying, referring to his family's 101-square-meter apartment in Bulgaria's Burgas that they bought 6 years ago.

The wife of Russian Deputy Finance Minister Sergey Storchak has declared a 40-square-meter apartment in Bulgaria's ski resort of Bansko, bought back in 2008.

"She saw that the price to quality ratio was phenomenal, especially given the prices in Moscow, which made her choose to buy it," explains Storchak, adding that he was in Bansko only twice, and that his family does not use the apartment very often.

"Bulgaria is not deemed an elite property market, there is no comparing it with Monaco, London, or New York. It is mainly for resort properties, and there are no problems for a foreigner to buy real estate," explains Georgiy Karchamazo from property portal Tranio.ru.

The Russian Duma will be considering two versions of the relative legislation - the first merely obliging Russian officials to declare their properties abroad, while the second might in fact oblige them to get rid of them in 6 months' time. It remains unclear where the harsher legislation will get through.

August 3, 2012Bulgaria Ranked 8th Most Popular Property Destination

Bulgaria has climbed 10 places to place 8 in the ranking of international property portal TheMoveChannel.com for the most popular property destination in the world.

The 2012 edition of the Top of the Props report of the UK based property portal notes that Bulgaria "pulls off an Olympic comeback" in the ranking.

Bulgaria is said to take 2.57 per cent of all inquiries on the site.

The overseas property portal notes that Spain retains its first place in the ranking, followed by the US, France and Portugal.

The other countries that make up the top ten are Italy, Turkey, Cyprus, Brazil and Croatia.

Greece drops 3 places to place 11 in the 2012 edition of the annual ranking of the property portal, while Malta drops 2 places to place 12.

Grenada registers the biggest progress, up by 14 places to place 31 in the ranking.

The property portal notes that smaller markets have a much more flexible approach to UK nationals interested in investing in holiday property or buying a second home.

Dan Johnson, director of the overseas property portal, devotes special comments to Bulgaria's performance: "When Bulgaria sprinted into TheMoveChannel.com's Top 10 last July, many balked at the idea that it could rival more traditional destinations. Over the last year, demand has definitely dropped, but as the market becomes more stable, its training appears to be paying off: with no major marketing activity or push from developers, Bulgaria's improved monthly ranking seems to come directly from the appeal of its prices. A new law allowing overseas buyers to invest without registering a Bulgarian company first can only help its fitness. Was last year a practice run for this summer? Luckily, we won't have to wait four years to find out."

August 2, 2012Brits Selling Bulgarian Holiday Properties to Russians

The Russians are steadily replacing the Brits and Irish as the buyers on the market of holiday properties in Bulgaria, according to a report of real estate agency Foros.

While the trend is not new, and started after the global economic crisis, the Brits are now again increasingly active on the Bulgarian market of vacation properties but this time by selling, the report says.

According to Foros, the British who several years ago invested in cheap vacation properties still under construction are now driving the entire market of "secondary" vacation properties in Bulgaria, which in turn is the leading segment on the entire holiday property market in the country.

The major buyers of holiday homes in Bulgaria now are the Russians who focus mostly on the Southern Black Sea coast but have also started to consider Bulgaria's mountain resorts and the village homes along the Bulgarian Northern Black Sea homes, the report finds.

It cites data indicating that the number of real estate deals with Black Sea coast vacation properties in Bulgaria grew by 17% in the first half of 2012 year-on-year.

The average offer price of vacation properties on Bulgaria's Southern Black Sea coast was about EUR 550 per square meter in June 2012.

July 25, 2012Sofia's Total Office Space Reaches 1.6 Million sq m

The total office space in the Bulgarian capital Sofia has reached 1 557 000 square meters with the completion of the latest developments in the first half of 2012, Forton International, a consultancy, announced Wednesday in a release.

According to Forton International, a Bulgarian consultancy which is a local partner of Cushman & Wakefield for Bulgaria, Serbia, Macedonia, and Kosovo, a total of 79 000 square meters of new office space were completed in Sofia in H1 of 2012, which is a 21% increase year-on-year.

The consultancy notes in a report that the Sofia office space market was relatively busy in the first half of the year, with the relocation of several banks' headquarters being among the major factors.

"Over the last six months, the banking sector took advantage of the appropriate time in order to optimize its spending and to provide its employees with a more efficient working environment. Actually, 50% of the newly occupied office space was occupied by banking institutions - Post Bank (Eurobank EFG) consolidated its offices in one location, Alpha Bank and Texim Bank also relocated their offices," commented Vladislav Kaizerov, Office Space Manager at Forton International.

"We have also seen dynamics in the traditionally attractive market sectors where leading companies relocated their offices. A large pharmaceutical company rented over 1 300 square meters in one of the most high-quality and modern class A projects on the market - Serdica Offices. Trader.bg consolidated its development and financial center on similar space in Litex Tower driving its occupancy to over 95%. Melon AD chose Polygraphia Office Center for their relocation over the next few years where they rented almost 1 700 square meters," Kaizerov added.

Forton points out that even though the supply is still substantially greater than the demand for new office space in Sofia, high-quality projects are succeeding more actively in attracting tenants and boosting their occupancy.

Office space in Sofia under construction has decreased by about 40% year-on-year, with 64 000 square meters of new office space expected to be completed by the end of 2012, according to Forton.

"The positive data about FDI in Bulgaria in the first half of 2012 are also influencing positively the office space market especially through the presence of international tenants that outsource their activities to Bulgaria. The total amount of office space rented in the first half of 2012 is 53 200 square meters. Regardless of the observed activity, however, we don't expect a tangible growth in occupancy rates in the months to come," stated Forton International's office space expert.

According to Forton, occupancy rates for first-class office space in Sofia remained at EUR 9-12 per square meter.

Forton International expects that improved occupancy and the sustainable occupancy rates will increase investor interests towards office space in Bulgaria.

July 23, 2012Bulgaria's Dwelling Prices Up by 0.2% in Q2, 2012

Dwelling prices in Bulgaria increased by 0.2% in the second quarter of 2012 compared to the first three months of the year, according to data of the National Statistical Institute (NSI).

The increase was due to an increase in prices of apartments in 13 district cities (most notably in Targovishte, up by 3.5%, Razgrad, up by 3.4 and Veliko Tarnovo, up by 3.1%) and the decelerated price decreases in Sofia compared to end-2011.

As Bulgaria's capital Sofia has put on offer a bumper crop of office space, companies based here become choosier about the working place they want to buy or rent, a survey shows.

More than 50% of the interviewed Sofia-based companies frown at current rental levels of office projects in the capital, saying they are not aligned to the market conditions, according to a report by realtor Colliers.

According to approximately 90% of the interviewed companies the supply of office properties in Sofia exceeds the demand.

Only 21% of the interviewed companies consider the supply of high quality office projects in Sofia not sufficient, according to the survey.

Asked to determine the characteristics of a high quality office project, respondents singled out environment and convenient location, high quality construction and parking space
.

June 5, 2012Bulgarian Cabinet Mulls Disaster Insurance Fund

Bulgaria's Deputy Minister of Regional Development, Dobromir Simidchiev, admitted Tuesday that a mandate to have insurance on private buildings would not be accepted by all owners.

He, however, confirmed the cabinet's intention to have insurance policies for all types of real estate.

Over the weekend, his boss, the Minister of Regional Development, Lilyana Pavlova, called for the introduction of mandatory insurance for private residencies and all privately-owned buildings.

"The law now postulates mandatory insurance for State and municipal properties only, but I believe the mandate should be for all buildings in the country. We have insurance with full coverage for our private automobiles; we must do the same for our homes as well," said she in an interview for Darik radio.

Speaking Tuesday for the largest private TV channel bTV, Simidchiev admitted that the Cabinet is attempting to put the issue on the table, but the country lacks a clear direction when it comes to property insurance. He pointed out that only 2-3 European countries have mandatory real estate policies.

The Deputy Minister gave as examples neighboring Romania and Turkey which have the so-called "disaster insurance pool," which is different than individual insurance in being a fund used to cover damage caused by large-scale natural disasters, affecting many people and facilities.

The left-wing Bulgarian Socialist Party, BSP, proposed the establishment of such fund in the aftermath of the 5.8 magnitude on the Richter scale earthquake that hit the western city of Pernik and western Bulgaria on May 22.

Insurance company managers in Bulgaria are quoted saying that their sector is at fault for the low percentage of insured properties because it does not advertise well-enough real estate insurance products.

June 4, 2012Natural Disasters Alter Bulgaria's Real Estate Market

Earthquakes and torrential rains that hit Bulgaria in May have altered the real estate market with preferences now geared towards lower floors and panel buildings.

The news was reported Monday by the new agency BGNES, citing a study of a leading real estate agency.

Before the earthquake, buyers have shown more interest towards middle and high floors for the beautiful view, but now they ask for first floor apartments.

74% of buyers now prefer a residence between the second and the sixth floor, compared to 63% before the tremors, while those wanting a first floor apartment went up by 6% - to 11% from the previous 5%.

According to experts from another real estate agency, the percentage of those who want an apartment on the 10th floor or above is down by 80%; the one of those favoring the sixth floor and above - by 40%, while interest towards residencies between the second and the sixth floor is up 20% and towards first floor places - close to 100%.

The earthquake also resuscitated interest towards panel buildings, which experts say are built with high safety, particularly quake-safety, standards, while the negatives are their unappealing look and lack of energy effectiveness.

Real estate brokers further forecast increased interest from residents of large cities towards low-story and modest buildings in the countryside.

March 15, 2012Big Bargains in Bulgaria for Holiday Home Hunters

The cost of buying a holiday home in Bulgaria is getting cheaper, which is good news for foreigners seeking a bargain deal for their new place in the sun.

According to the latest data released by Bulgarian Properties realtor, prices of holiday homes in Bulgaria have slumped by a whopping 50% in comparison with 2008 when they peaked.

Holiday home hunters generally prefer to buy property in Varna on the Black Sea or Burgas. The southern coastal resorts and Sunny Beach in particular have witnessed the highest number of deals.

Russian investors now dominate the Bulgarian market as British holiday homeowners are selling up and coming home in droves - or at least sending foreign money back to the UK.

Russians, who account for 40% of foreign buyers on the property market in Bulgaria, have shown a special preference to the Sunny Beach resort.

In February the average asking price for apartments in the Sunny Beach resort stood at EUR 677/sq. m. compared to EUR 853/ sq.m. a year ago. Deals however are concluded at a much lower price - about EUR 500/sq. m. on average, according to experts' estimates.

Prices are in freefall in the biggest winter resort of Bansko too.

The average asking price of apartments in Bansko in February stood at EUR 550/sq. m., while offers on the low market are around EUR 350/sq.m. Since the beginning of the year, transactions in the mountain town are concluded at about EUR 450/sq.m.

Many Brit expats who have settled permanently in villages and even in the most remote rural areas are happy to sell their houses at a price tag of about EUR 15 500.

Property investors who bought in the boom years, before the credit crunch in 2008 have had their fingers burnt. Even though Bulgaria is outside the eurozone, most property transactions are in euros.

Meanwhile investors from Russia, Ukraine and Azerbaijan are showing a growing interest in real estates located in Bansko, Sofia and along the Black Sea coast.

They are looking for already built properties or new construction and refrain from greenfield purchases.

The residential property market in Bulgaria has received a lot of investment from both locals and foreigners over the past few years.

But Bulgarian property transactions have slowed considerably since 2007, as a consequence of an oversupply of homes and a sluggish economy, causing prices to fall.

Bulgarian property prices have been depreciating at a rather rapid pace, ensuring that price levels remain extremely cheap compared with many other European countries.

Property prices in Bulgaria's biggest ski resort of Bansko are in freefall and with the exit of British and Irish buyers, Russian investors now dominate the market, putting to good use their bargaining skills, a survey shows.

Many Bulgarian and British investors, who have been lured into Bansko ski properties with no exit in sight, are seeing their dream come to a sorry end and scramble to attract the attention of Russian buyers.

Even though over the last two years Bansko has not seen the launch of new holiday complexes, there is a huge number of properties up for sale and prices have already fallen by 50%.

Statistics show hotels with over 7000 beds have opened since 2007. About 80% of them are in apartment complexes. At the same time, the number of transactions in the region has decreased significantly - from 4000 in 2009 to 1800 last year. Of these, 1300 were purchases on the secondary market, a survey of investment company GreenLife shows.

At the end of last year Bansko was named the world's best value ski resort for Britons.

While in 2010 it ranked second, preceded by Romania's Poiana Brasov, now Bansko has emerged as the most attractive winter resort for Britons on a budget since prices have fallen by 5% in comparison with 2010.

The total cost for ski equipment, lift passes, ski tuition, drinks and an evening meal for two came in at GDP 263 which was still GBP 100 cheaper than at the runner-up resort of Arinsal in Andorra, whose prices have also fallen by 5%, according to the Ski Resort Report 2011, carried out by Post Office Travel Money in association with Crystal Ski.

The little town bordering Pirin National Park, about 160 kilometers south of Bulgaria's capital Sofia, offers a stark but nice contrast between the cobbled streets and churches of the old town and hundreds of millions of euros poured into hotels, ski runs and bright blue gondola bubbles in its modern part.

Supervising all this is the roughly 2,800-meter Todorka peak.

The formerly off-the-beaten-path destination has recently gone mainstream, but it is very rarely that tourists see the vistas doom-sayers warn against - construction cranes and gaudy mutrobaroque hotels, favored by the nouveau riche and organized crime mobsters, known as mutri, with which they try to prove their wealth.

Tourists need to spend no more than 25 euros a night in those hotels, which exemplify Bansko's ambitions best - quite chic, but without the ridiculous attempts to be consmopolitan often found at Bulgarian resorts.

The old town, where the prices are lower even than the capital Sofia, is a collection of ski and souvenir shops with cozy, dimly lit taverns and restaurants. It is not unusual to see an entire lamb or pig roasting on a spit in front of one of the eateries.

The alternatives are the pubs, frequented by British, Irish and Greek tourists, who, together with the Russians, have until recently been the driving force of Bansko's prosperity.

British expats, holiday homeowners and pensioners, living in Bulgaria and Bansko in particular, are selling up and come home in droves - or at least sending foreign money back to the UK.

Property investors who bought in the boom years, before the credit crunch in 2008 have had their fingers burnt. Even though Bulgaria is outside the eurozone, most property transactions are in euros.

Meanwhile investors from Russia, Ukraine and Azerbaijan are showing a growing interest in real estates located in Bansko, Sofia and along the Black Sea coast.

They are looking for already built properties or new construction and refrain from greenfield purchases.

March 5, 2012UK Brokers: Huge Money Converted Back into Sterling from Bulgaria

Bulgaria is among the countries, from which UK foreign-currency brokers are reporting a staggering amount of money being converted back into sterling.

Most transactions back to sterling in recent months come from Spain, Bulgaria, France and the USA, according to data of Currency Index, as cited by The Telegraph Weekly.

"With Bulgaria, property investors who bought in the boom years, before the credit crunch in 2008 have had their fingers burnt. Even though Bulgaria is outside the eurozone, most property transactions are in euros," the article comments.

British expats, holiday homeowners and pensioners, living in Bulgaria, are selling up and come home in droves - or at least sending foreign money back to the UK.

Experts, interviewed by The Telegraph Weekly, say the reasons for the return are myriad, the most important being the inability to fund their lifestyle given the depreciation of sterling from its heights of EUR 1.50/GBP 1 to less than EUR 1.20/GBP 1.

Many pensioners who settled for a life in the sun have seen the purchasing power of their UK pensions plummet as the pound weakened and the cost of living soared in their new homes, making it too difficult for many to afford to stay.

In the past 12 months, currency broker HiFX has seen the amount of euros converted back into sterling rocket by 155%, despite the euro weakening recently.

During the past three years, there's been a 25% increase, year on year, in funds being sent back to the UK, according to Smart Currency Exchange.

The money coming back to the UK from the eurozone in just the last three months of 2011 went up 41%, according to World First, compared with the end of 2010.

It has also seen double the amount of Australian dollars being changed into pounds over the same period, as expats cash in on the best exchange rates in nearly 27 years.

Owning a second home abroad was once the preserve of the super-wealthy, but in the past decade a heady combination of TV property shows and cheap mortgages has convinced an estimated half a million Britons to buy their own place in the sun.

The value of UK-owned foreign property investments peaked at GBP 58 B in 2008, up from GBP 10 B in 2000.

Now however British owners of second homes overseas, including Bulgaria, are elling up due to falling rental income and the sliding value of their overseas properties.

February 24, 2012Bulgarian President: Disaster Prevention Is Top Priority

The ownership of dams in the country must become clear in full, according to Bulgaria's President, Rosen Plevneliev.

Plevneliev discussed Friday with Deputy Prime Minister and Interior Minister, Tsvetan Tsvetanov, a series of measures to deal with the damage and devastation from recent floods in southern Bulgaria, in the Region of Haskovo.

"For every dam we must know the owner, the manager, the concessionaire. A small dam can be municipal property, but be managed by "Irrigation Systems" and/or be given on concession. We demand clear ownership registries, a clear responsibility, and clear rules between the owner and the operator, the owner and the concessionaire, "the President stressed.

He further voiced the opinion that the Ministry of Environment and Waters should prepare the form contracts, adding that for him it is extremely important to not only deal with crises, but prevent damages and casualties.

During the week, Economy and Energy Minister Traicho Traikov reported that out of 607 checked dams, 12 are unsafe.

Plevneliev also pointed out the need of reform in the water sector, which will be part of the negotiations for the granting of EU funds in the next program period, after 2013.

He thanked all who took part in the rescue effort, saying he was proud to be the President of people who show solidarity in hard times.

The roof over the "Arrivals" terminal entrance of the airport in Bulgaria's second largest city of Plovdiv has collapsed during the night because of snow that has accumulated on it.

The information was reported Tuesday by the airport Director, Doychin Angelov, who said that there were no passengers at the terminal due to the late hour.

Plovdiv airport was closed Tuesday morning over a 30-cm snow cover, but reopened later during the day.

The new passenger terminal was launched two years ago with BGN 19 invested in it.

Angelov says the construction company "Koev" must be the one to give answers about the quality of construction work. Last year, the roof of the new terminal started leaking while the first problems were reported as early as 2009, several months after the official opening. In addition to the leak and the collapsed roof, there are cracks in the walls and floor.

Last year, the airport authority threatened to sue the builder over the poor quality of work.

Bulgaria's capital Sofia has registered the highest decrease in the rent prices for prime office spaces among 53 European cities, a CB Richard Ellis report shows.

In the fourth quarter of 2011 Bulgaria's office rents dropped by 7.1% year on year. Compared to the previous quarter, the decrease was 3.7%, the highest decrease among the European cities included in the report, according to the Mediapool news agency.

The rents in Sofia's highest office space rental market segment were EUR 13 per sq m at the end of the fourth quarter of 2011.

Drops in the prime office space rents were observed in several regions of Croatia, Ireland, the Netherlands, Portugal and Spain, as well as UK's Edinburgh.

The biggest increase was registered in the Russian market, with rental prices growing by 33% year on year.

January 17, 2012Bulgaria Still in Top Ten on Britons' Property Map - Overseas Portal

Bulgaria is keeping its standing among the top ten most preferred real estate markets for overseas buyers, according to a new infographic released by TheMoveChannel.com.

The infographic, which is based upon the enquiries received by the overseas property portal in 2011, showed that 2.7% of all enquiries in December were directed at Bulgarian property, making the country the eighth most popular property destination.

The news about Britons' revived interest in Bulgarian property and the country's return to the overseas property portal's top ten for the first time in three years broke in the summer last year.

The portal's director Dan Johnson commented that Bulgaria's real estate sales have been improving all year, with buyers attracted by exceptionally low prices for winter property. According to him it was no surprise that interest has increased.

The news however was derided by the Independent, which claimed it has filled some Britons with fear.

"Perhaps it's because Bulgaria is outside the eurozone and is relatively cheap that it's on the way back into favour? But as far as Bulgarian property is concerned I'm reminded of the saying: Fool me once, shame on you; fool me twice, shame on me," wrote the newspaper editor Julian Knight in the middle of August.

He argued that even before the financial crisis of 2008, it was clear that "there was something badly wrong with buying in Bulgaria"- developers selling property on land they didn't own; running off with people's deposits; sub-standard construction; no services connected to properties.

Owning a second home abroad was once the preserve of the super-wealthy, but in the past decade a heady combination of TV property shows and cheap mortgages has convinced an estimated half a million Britons to buy their own place in the sun.

The value of UK-owned foreign property investments peaked at GBP 58 B in 2008, up from GBP 10 B in 2000.

Recently however British owners of second homes overseas, including Bulgaria, have been selling up due to falling rental income.

January 6, 2012The Bulgaria 2011 Review: Properties

Bulgaria has been ranked the fourth worst property market to invest in 2011 in a list, compiled to gauge the sentiments of and help Britons make the best investment choice for financial gain.

Bulgaria was once regarded as the 'the new Spain' for overseas investors, but this is no longer the case, Colordarcy consultancy, which carried out the survey, commented.

"Property prices are in freefall and with the exit of British and Irish buyers, Russian investors now dominate the market and their strong bargaining skills result in continued falling prices," it adds.

The report says that for many investors lured into coastal and Bansko ski properties with no exit in sight, the dream came to a sorry end.

Meanwhile the capital Sofia was subject to huge foreign investor interest in 2007, but the ensuing bubble has long since burst.

Ireland is the worst place to buy a second home under the sun for Britons, according to the ranking.

"Once the envy of the world when the property markets boomed between 2000 and 2006, the sheer scale of their downward spiral becomes apparent when one recognizes that apartment prices fuelled by yet another painful 15% fall in 2011 are now down by a massive 60% from their peak," the agency says.

Usually we understand if there is a bubble in a market it is just before it bursts, and before that we make very clever conclusions. My very clever conclusion is that we still do not have a real estate bubble, or at least it is not so inflated that we can expect it won't burst soon. This is what Georgi Pavlov, executive director of Address Real Estate, told Bloomberg TV Bulgaria.
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